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In exponential smoothening method, which one of the following is true?
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- 0 ≤ α ≤ 1 and high value of α is used for stable demand
- 0 ≤ α ≤ 1 and high value of α is used for unstable demand
- α ≥ 1 and high value of α is used for stable demand
- α ≥ O and high value of α is used for unstable demand.
Correct Option: B
0 ≤ α ≤ 2
high value of ‘α’ means more weightage for immediate forecast.
Less value of ‘?’ means relatively less weightage for immediate forecast, or almost equal weightage for all previous forecast.
Hence high value of forecast is only chosen when nature of demand is not reliable rather unstable.
